GPU Prices Fell After Ethereum Merge
Ethereum merge finally took place on September 15 after crypto lovers waited for a long time, and it switched to a proof-of-stake (PoS) consensus mechanism. This means that transaction woes are no longer an issue for Ethereum and today, the network is able to execute anywhere between 20,000 to 100,000 transactions per second (TPS) which is an enormous growth considering its previous rate of just 30 TPS. What’s more, fears of excessive energy consumption have completely disappeared since this version of Ethereum is 99.9% more energy efficient compared to the former version.
However, it is important to note that after Ethereum merge GPU prices experienced a drastic downfall in several parts of the world. This was the major question that was concerning to a vast number of crypto lovers as they were not sure what would happen to the graphics processing unit market after this transition. Also, after this merge, miners who were carrying out payments with Ethereum were substituted by ecosystem participants who are able to stake this coin in order to become network validators. This means that the Ethereum-centric graphics processing unit has been completely ruled out of the picture.
As we have noted, after Ethereum merge reached its final stage, several sought-after GPUs started to decrease in value. For instance, the price of Nvidia’s highly popular RTX 3080 has fallen from $1,118 to approximately $700 in the last few months in China. Moreover, GPUs established by companies like MSI also experienced significant price drops after July.
Crypto White, who is a pseudonymous chief technical officer for ZK.Work — a mining platform for zero-knowledge proofs, said that the major reason behind such a drastic downfall in GPU prices was indeed Ethereum merge. Before this merge occurred, Ethereum had a total of 860 terra hashes per second of hashing power, of which less than 200 TH/s went to Ethereum Classic and ETHW, a PoW fork of Ethereum that went live after the upgrade, alongside other mining projects, while 660 TH/s was shut down temporarily.
Also, he added that the incoming hashing power of Ethereum is decreasing gradually on the Network after mid-September when the merge took place. This has induced several miners to completely shut down their operations, hence the price of Ethereum did not raise as expected. They prefer to wait for new mining opportunities since the current traditional mining is not able to generate sufficient revenue in order to support their running costs. What’s more, the price fall of GPUs was also induced by the fact that NVIDIA 30 series entered the secondary market for sale, but White hopes that will eventually regain strength and find utility with the help of potentially prolific minable coins.
What The Future Holds
It goes without saying that the Ethereum merge was one of the biggest achievements for the cryptocurrency mining sector. White also stated that GPU prices will most likely stabilize in the near future, and they won’t be as cheap as today. He believes that these significant price alterations were factored in before the Ethereum merge occurred, so manufacturers such as NVIDIA had already begun to get rid of their inventories some time ago. White concluded that low-end GPUs will most probably disappear from the market, whereas high-end GPU demand will surge in the near future.
As we read in the statement of Ilman Shazhaev, founder and CEO of blockchain gaming metaverse Farcana, the GPU industry is at the center of everyone’s attention today given the considerable number of different PoW protocols. Even though Ethereum experienced a significant transition, the number of protocols that need GPUs is not reduced and the demand for them will be maintained in the future. Also, he noted that several metaverse-centric innovations will play a huge role in sustaining the demand for GPUs.
When it comes to the price of Ethereum, we have to say that it was not affected by the merge at all. This fact surprised the majority of crypto enthusiasts since the Ethereum merge has induced energy consumption to decrease by a stunning 99.9%, resulting in a 0.2% reduction in global power consumption. However, this digital coin has experienced a serious price downfall starting on Sept. 16 as it fell from $1,630 to its current price point of $1,330. Experts are not sure what the future holds in this regard, so we have to wait and see what happens.
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